Franklin Mining, Inc. (FMNJ)

[StayinLong]

Gents,

Been out of town and just catching up on the postings. The PRs I have read appears that FMNJ will go after project financing. Not sure about this project but typically in large LNG facilities, the lenders will require the company to have a certified gas source for the expected life of the project. The company will buy the gas or if they have their own, they will contract D & M or another reserves certification company to review the reservoir data and certify a proven reserve number. In this case, Petty will look to secure a gas sales contract from someone else. The lender still may require certification from the seller to FMNJ.

Also, in an LNG liquification project, the lenders will required sales contracts for the LNG. In this case, I expect Petty will make arrangements with some company to sell or market the product for the GTL plant.

In addition, there is usually a rather detailed due diligence process requiring a review of political risk, environmental impact studies, etc.

As stated earlier in this thread, the process is licensed from the process technology owner like Conoco Phillips (LNG) or others depending on the process. The company hires an engineering company to develop a request for bid package (RFP) for the project. The company with the assistance of their FEED engineering company will bid the project out for engineering, procure and construct. The licensor will stay involved in the project to some extent to safeguard their technology but also to safeguard their reputation through a successful application of the technology. On time, on budget, etc are the risk the company must mitigate through a lump sum EPC contract or excellent project management. By the way, my estimate for duration from project sanction to end of performance commitment would be more of the order of 30 months. There is a lot of work to line up project financing, prepare a bid package, bid out, construct and start up a greenfield project but through contacts, Petty may be able to accelerate some of the activities.

My take on the situation is FMNJ could get the agreements in place for the technology, feed gas supply for the plant, sales in Argentina, find the optimum location, FEED engineering and project financing. At that point, with a project plan and a lead on project financing, FMNJ would have a workable plan that could be monetized. Yes sold. I seriously doubt FMNJ has the depth to manage a project of this magnitude even through a lump sum EPC contract.

Just a few random thoughts.